* Shell Midstream Partners LP files to raise up to $750
* Intends to list units on NYSE under the symbol "SHLX"
* Offering expected in the second half of this year
(Adds details on MLP assets, background)
By Swetha Gopinath
June 18 Royal Dutch Shell Plc said it
would spin off some of its U.S. pipelines into a master limited
partnership (MLP) and take it public, becoming the first of the
industry majors to use such a structure to monetize assets.
Shell Midstream Partners LP filed with U.S. regulators on
Wednesday to raise up to $750 million in an initial public
offering of common units.
Companies holding midstream assets, such as pipelines and
storage facilities, and structured as MLPs have found favor with
investors as they distribute most of their earnings to
The listing of two MLPs, PBF Logistics LP and
GasLog Partners LP, in May stood out in a lackluster
Shell Midstream, which owns stakes in four onshore and
offshore pipelines in Texas and Louisiana, said in its IPO
prospectus that it plans to use proceeds from the offering to
acquire stakes in Shell's other pipelines.
Shell, like other big oil companies, is facing increasing
pressure from investors to cut soaring costs and raise
shareholder returns via dividends and share buybacks.
The company's plan to spin off its pipeline assets comes a
day after it launched a sale of most of its stake in Australia's
Woodside Petroleum Ltd. It plans to shed $15 billion of
assets by the end of next year.
"As all of the majors have significant midstream assets, and
as they have a tendency to mimic one another's strategy at
times, it will be interesting to see if the other majors begin
to follow Shell's lead on this front," Simmons & Co analysts
wrote in a note.
Shell Midstream's assets include a 43 percent stake in a
crude oil pipeline connecting Houston in Texas to Houma in
Louisiana, a 28.6 percent stake in a pipeline to the offshore
Mars field in the Gulf of Mexico and a 49 percent stake in a
refined products pipeline linked to four Louisiana refineries.
Shell Midstream reported net income of $23.8 million on
revenue of $36.1 million for the quarter ended March 31, on a
pro forma basis, according to the IPO filing.
Barclays and Citigroup are underwriting the IPO, the
Houston, Texas-based company said in its filing with the U.S
Securities and Exchange Commission. (bit.ly/1iG7z6c)
The filing did not reveal how many shares the company
planned to sell or their expected price for the offering, which
is expected in the second half of the year.
The company said it intends to list its common units on the
New York Stock Exchange under the symbol "SHLX".
The amount of money a company says it plans to raise in its
first IPO filing is used to calculate registration fees. The
final size of the IPO could be different.
Shell's U.S.-listed shares were up 1.3 percent at
$81.48 in late morning trading.
(Additional reporting by Amrutha Gayathri; Editing by Saumyadeb